Coalmania sweeps Coalition

You can see where it’s going. The Coalition election machine is switching course and revving up. It’s not going to tackle any issue of substance impacting the country. Instead, it’s going to go full blown coalmania, out of the blue, to shoot for another energy election bamboozling.

Via the AFR:

The federal government has confirmed the Clean Energy Target as proposed by Chief Scientist Alan Finkel will be overhauled and replaced with a policy that will place much greater emphasis on coal-fired baseload power and possibly a slower transition to renewable energy.

At the same time, energy regulators and industry sources suggested there was no need to prolong the life of the Liddell Power Station in NSW and that energy shortfall created by its closure in 2022 could be met by other means

The federal government has given AGL Energy 90 days to reveal long-term plans to replace the generation capacity of the Liddell Power Station, even though there was no national energy policy to guide the process.

Federal Labor and senior sources within the energy industry said instead of picking on individual companies,the government should get on with announcing a policy to give all energy investors the certainty they crave.

Does anyone recall the PM that lost his job defending a market mechanism for energy decarbonisation? The PM commissioned Finkel himself but’s that’s gone too. Coalmania is all that matters now even though it won’t do anything for five years for power prices and even then will only keep prices higher.  The notion that we should deal with the real problem, the price of gas, given it sets the marginal cost of electricity, is nowhere.

Over at The Australian, Coalmania (or should I say Coalition re-election mania) is in full roar. Gas sector apologist, Judith Sloan, redoubles her assault:

The Turnbull government would be completely bonkers to commit to a clean energy target. Such an intervention is simply a dressed-up version of the renewable ­energy target that has so distorted our electricity system that all we can now purchase is high-priced, unreliable power.

Don’t believe all the drivel about a CET allowing clean coal or gas. It is much less about the benchmark that is set — CO2 per megawatt hour — than about the emissions reduction target.

Under the Finkel model, we will move from 22 per cent renew­ables in 2020 to 42 per cent in 2030. Virtually all new ­investment will be in unreliable ­renewables.

But, you say, the cost of renewables is coming down and there is scope for the intermittent nature of renewable energy to be resolved through back-up solutions, including gas peaking (expensive), pumped hydro (inefficient) and untested batteries.

It’s not another RET. It’s technology agnostic. That’s the whole point of it.

But don’t get in the way of Coalmania! Don’t invest based upon principles of economics, or long term profitability or sense. Not if it ain’t coal! Janet Albrechtsen joins in:

A few weeks ago, the Prime Minister said more than two million Australian families and small businesses could save 25 per cent by changing energy plans or retailers. At a meeting with the heads of Australia’s major energy retailers, Malcolm Turnbull demanded that they write to customers informing them of better deals. Maybe the letter is in the mail.

I rang my energy provider a few days ago and asked a very obliging woman in AGL’s call centre how I could reduce my power bill. She immediately offered a 24 per cent discount. No new contract, just pay on time please. I inquired whether lots of people were asking for a better deal from AGL. She said not so many. People didn’t think to ask, she said, and they weren’t always told of new discounted deals. The woman said she was sad for older customers who were really feeling the pinch of steep electricity prices. Not to mention the poor, regardless of age, people trying to stay in business, even grow their business and employ more people. In fact, all of us are paying for a monumental policy failure in a country with abundant supplies of cheap and reliable energy.

Headlines about AGL boss Andy Vesey being a “victim” in the government’s power blame game don’t wash. As Scott Morrison likes to say, cry me a river. When Australia’s largest energy supplier offers a 24 per cent cut to your power bill only when a customer asks for a discount, it says something about how AGL prices power and how it treats customers. It says it’s charging more than it needs to, because it can. So who’s the victim?

Dennis Shanahan seizes the moment:

After two years as Liberal leader, Turnbull has succeeded on power prices. He should have started when he became leader and stuck with it.

Turnbull, Scott Morrison, and Josh Frydenberg are putting rising prices, not climate change, as the priority and it is giving the Coalition the edge on Labor in parliament.

Having suffered at the hands of AGL over the extension of the life of the Liddell power station in NSW to try to find the lost 1000 megawatts of electricity, Turnbull went hard yesterday and finally took “as a compliment” that he was standing up for coal.

In response to Labor claims that five coal-fired power stations have been closed, Turnbull’s put-down was that the ALP “wanted to close more of them, and more frequently”.

Shorten’s response is thin on policy and politics: Labor just says the clean energy target must be implemented and then everything will be hunky-dory.

Some nice balance there!

Suddenly, coal-fired power is under threat from all angles!

EnergyAustralia has warned it could be forced to shut one of the nation’s newest and most ­efficient black-coal-fired power stations supplying up to 1.2 million customers in NSW, following a Court of Appeal decision it claims has threatened its only supply of coal to the plant.

The potential closure would take up to 1400 megawatts out of the energy market, or the equivalent of 15 per cent of electricity supply to the NSW system.

The Australian has confirmed with EnergyAustralia executives that the prospect of a forced shutdown of the Mount Piper power station in central-western NSW, which has an operational life to 2042, was a “real risk” following legal action launched by green ­activist group 4nature against planning consent for an extension of the Springvale mine owned by Centennial Coal.

And Elon Musk has swindled SA:

A contract between US tech billionaire Elon Musk and the South Australian government for the world’s largest lithium-ion battery hides the cost and key details, fuelling claims the deal is a “marketing con”.

The contract says the grid-­connected battery facility is to be commissioned and operational by December 1.

“The facility will provide ser­vices to maintain power system security, integrity and stability for the South Australian electricity network, prevent certain load shedding events, provide supply during critical peak periods and participate in ancillary services and wholesale electricity markets,” the contract says.

The contract value is “not disclosed” and the contract is “not disclosed in full as it contains confidential business information”.

…“With every passing day Labor’s secret deal sounds more like a marketing con than a genuine plan to deal with South Australia’s electricity problems,” Liberal deputy leader Vickie Chapman said. “Jay Weatherill needs to be honest with the people of South Australia about how much public money he is handing over to a foreign billionaire.

Source: Coalition!

Now look, there are real issues with energy. I’ve written and warned about the gas crisis for five years. We need some form of baseload power while renewable storage technologies develop. We always knew this. That’s why gas was seen as the “transitional fuel” to substitute coal.

The Coalition has sat on its hands as this crisis developed for years. It supported the RET driving coal closures all along while doing nothing to lower the gas price over that time, and recently finally reacted with overly weak domestic reservation.

Now, with its election prospects in the dunny, having flopped around for a policy it can create hysteria around for years, it’s finally thrown away all sense and reason and settled on coal as the answer to is own woes.

This is Tony Abbott’s manufactured carbon tax moral panic all over again, energy power grab 2.0, and that’s all it is:

Malcolm Turnbull is facing a backbench push to stop a clean energy target being embraced as government policy, after former prime minister Tony Abbott fired a warning shot on the political risk of adding the new scheme to existing subsidies for renewable power.

The Prime Minister yesterday played down the need for the target as he attacked Labor over energy prices and reliability, putting a priority on affordable power rather than cuts to carbon emissions.

A solid group has formed within the Coalition party room to oppose a clean energy target out of concern it would push up prices and weaken the security of supply because it would favour renewables over coal or gas generators. The substantial minority is opposed to a clean energy target of any kind and appears unlikely to be satisfied by a scheme that offers small financial incentives for gas-fired power or the most advanced coal-fired power stations.

The Coalition is today a political cancer that jeopardises everything it purports to stand for: freedom, markets, conservation, and god help any person, nation or planet that gets in its way.

Comments

  1. reusachtigeMEMBER

    They are the only sensible party on coal as they have realised we have a massive competitive advantage that can be exploited for larger profits!

  2. Corrupt and captured. At the end of the day the people got the government and power prices they deserved.
    Sad but true.

    • I give Malcolm a bit more credit.
      Faced with the Abbott forces in the party room, Turnbulll knows he cannot tackle them head on,so he pretends to give in and accept their demands for Coal to be the be all and end all (which it is) of electricity generation.
      Secretly Turnbull still holds to his statement that he will not lead a government not dedicated to combatting AGW.
      So he plays along with the Loons and leads them over an electoral cliff. This he sees as the only way to keep his integrity, and give his grandchildren a livable future.

  3. Jake GittesMEMBER

    “Colaition decrabonisation Elon Mush” – clearly the sub editor was so bewildered by yet more stupidity – the Strayan resource that keeps on giving – they couldn’t see the errors.

  4. This will ensure Australia will pay the highest price for electricity in the world for now and beyond. I expect them to put a price on renewable next.

  5. adelaide_economistMEMBER

    Liberal deputy leader Vickie Chapman said. “Jay Weatherill needs to be honest with the people of South Australia about how much public money he is handing over to a foreign billionaire.

    Um, yeah. That’s the same SA Liberals who sold our power networks and generation to the Chinese and who are actively blocking the bank levy (on banks substantially owned by foreign interests).

    Weatherill has already publicly said the battery is ‘under $50m’ or similar.

  6. There is no reasonable or rational thought coming from any of the front bench of the Government, and it’s showing when the commentary paper (no longer a newspaper) is acting like news outlet from North Korea.

  7. The Turnbull Government is showing signs of waking from its slumber. Done right, the Reliable Energy Target might just help the Government win the next election. Or a least put it back in the running.

    Momentum is there, it just needs to be harnessed. A big problem remains, Malcolm and his adherence to the orthodoxies of current climate anxieties. If he can step aside from these and refocus energies on ensuring stability of energy supply along with moderation of price escalation he has the opportunity to remake himself in terms of leadership.

    • What say you about making electricity supply purely a responsibility of the states?

      In 2001, newspaper articles were published saying “if Perth gets power cuts in summer, the state government will lose the election”. There were no federal consequences to be had.

      • The State/Federal nexus is where matters complicate. State Governments have been large contributors to the energy mess here on the East Coast: over-ambitious renewable targets, prohibitions on new supply, our Smart Meters(!) etc. I’m guessing if the Federal Government reconfigured reduced or eliminated existing quotas and subsidues that encourage investment in renewables thereby pushing out gas and coal (almost 90% of Australia’s current energy supply) the States would be hard pressed to fund their own targets.

        I heard one report last night that renewable subsidies will hit around $30b by 2030. If that is correct, I’d definitely hard prune these schemes now.

    • Abbott convinced enough bogans – before the 2013 election – that the feds will cut power prices. He won the election but failed to cut power prices. He, Gillard, and Milne also refused to give poor me a $50 cheque to help pay the power bills. Nick Xenophon gave each pensioner a $75 cheque in 2017 and is the most popular politician in AUS. Go figure.

      The electorate is confused about who to blame for soaring power prices.

      My question was, should we go back to the system we had 10 years ago when electricity supply was purely a responsibility of the states?

      • The extension re coal reminds me of the Melbourne desal decision. Back in 06 the drought has been severe and the Labor govt realised Melbourne could run out of water which would see it electorally finished. Quick deal big announcement heros save the day. Equally nsw/vic blackouts will get them elevtorally belted so the feds are reacting similarly. I expect AGL will negotiate hard and be paid well for their cooperation. Certainly the desal construction unions did.

  8. mild colonialMEMBER

    What seems like a great plan in the cool of Spring may look like a char blackened chop in the middle of a sweltering, bush fire emblazoned summer.

  9. What could possibly go wrong with coal!

    From smh
    ‘Grave’: New study finds significant impacts of coal mining in Sydney catchment

    The ground is bulging and cracks are reaching from the surface to the coal seam in a section of Sydney’s drinking water catchment that sits above a mine, according to an independent study commissioned by the state government.

  10. A journalist with some time and resources should really try to draw out all the links between the Coalition and the coal industry. The corruption and lobbyist power is extraordinary.

  11. MB has flagged our current energy crisis for the past 5 or more years. The start-up of the Gladstone LNG plants was predicted to double domestic NG prices in Australia to close to the export contract price (Oil price-linked, with nett-back). The need for domestic gas reservation to protect Australian manufacturing industries was recognised by policy-makers well-before the LNG plants were approved. The trouble was that the CSG/LNG development was in regional QLD and the manufacturers in VIC & NSW, so interstate rivalry and National Party populism ensured no domgas reservation. The short-fall in CSG development to meet LNG capacity should have been foreseen. CSG extraction in Australia has unique geological and environmental aspects which posed major technical and, as it turned out, political risks. The promise of abundant cheap CSG which would ensure a low domgas price has not eventuated. International energy markets have also evolved in ways that were not anticipated viz falling oil price, LNG exports from USA, a spot LNG price at around 50% of contract prices. How these forces impact on Australian electricity prices is well-explained by this Bloomberg video. I think all Australians, and particularly our politicians, should view it.
    https://about.bnef.com/blog/gas-markets-go-global-rise-lng/
    Life-extension of Liddell PS is a woeful stop-gap measure. AMEO’s demand management strategies will be implemented to yield a 5-10% effective increase in NEM capacity. Construction of government-owned LNG import terminals in NSW and VIC should should be fast-tracked.

  12. The COALition sitting on their bum and howling at the moon like a pack of dingos about how to bring in more coal fired power.

    Hello, the world has moved on. This mob of dingos (I assume that they are Aussies to be in Parliament) need to get on their bike and work out how to get new power generation system to replace the retiring coal fleet. FFS you got FIVE years! Get off the COAL aid.

  13. Jumping jack flash

    A few things:

    “The federal government has given AGL Energy 90 days to reveal long-term plans to replace the generation capacity of the Liddell Power Station, even though there was no national energy policy to guide the process.”

    But apparently the minister for energy (ho, ho, ho!!!) has a “good relationship” with AGL. For what its worth. Which is nothing.
    There is no national energy policy nor will there ever be because how can there be? It would involve government meddling in the business of private companies, in a free-market economy. It just isn’t the thing to do.

    But, for fun, let’s assume the “minister for energy”, whatever that means, actually did some work and produced an energy policy, whatever *that* means. This would suddenly ignite years of arguments between the government and the energy sector, during which time, the energy sector would just do whatever they wanted anyway.

    Let the government rise up and take the bull by the horns: Buy the bloody thing. Run it. Provide cheap electricity to all.
    That would do more to affect the market than any amount of talking, pleading, or bribery. Deal with the bleeding-hearts, and let them use expensive gas, their own solar panels, or burn their own dung if they don’t want cheap grid electricity.

    If the government doesn’t want to do anything, then STFU complaining about the decisions of private companies and let the private companies do their thing. Because they will anyway. Energy policy or no.

  14. Congrats MB
    You were right very early on the impact of the end of the resourcer elated construction boom and you were right early on the gas issues (reservations/excess LNG exports/pipeline monopoly/electricity price impact
    Great owrk on two big issues where the mainstream media seemed to have no idea and government remained blinkered (perhaps intentionally)

    • Jumping jack flash

      “…and government remained blinkered (perhaps intentionally)”

      Well they didn’t sell the electricity off to private companies to create more problems for themselves.
      They did it to reduce responsibility, remove accountability, and grab a quick wad of cash.

      To think they care what happens now, beyond placating the masses, is foolish, and the energy portfolio is worthless, in my opinion.

  15. As more consumers link the accelerating costs of electricity to all the wind and solar subsidies they must realise state and federal labor policies will further harm their household budgets. Coalition’s best chance of holding power is to crucify the wind and solar power and enhance the prospect for reliable coal generation and the lower costs that go with it.

    Meanwhile the Victorian government is currently developing its load shedding policy in anticipation of it being implemented as early as November 2017. The linked map shows the priority areas, in red, for NO load shedding:
    https://upload.wikimedia.org/wikipedia/commons/f/fc/VictoriaElection2014-DistrictResults.png
    All other areas can have power curtailed at any time for any period to meet AEMO stability criteria. If you do not live in a priority area then you should give thought to having your own reliable power supply; either battery or generator. If battery ensure it can operate in island mode when the grid power is unavailable.